New York Mayor: Finanical crisis to go far and wide

LONDON, Oct. 6 (Xinhua) -- The months ahead are going to be awfully difficult as they come to terms with a financial system that spun out of control, and the pain is going to spread far and wide, visiting New York Mayor Michael R. Bloomberg said in a lecture here Monday.

"It would be nice to believe that the financial crisis is only a problem for bankers, and that taxpayers shouldn't bail them out. But that's the same kind of wishful thinking that got us into this mess in the first place," he said.

Mayor of New York Michael Bloomberg delivers a lecture in London Monday, Oct. 6, 2008

"The reality is that we are facing the worst confidence crisis in our lifetime and it is going to affect anyone who wants to borrow money to buy a car or a house or to expand their business or take out a student loan," Bloomberg said.

"Millions of people are just not going to be able to do those things. There's no sugarcoating this -- it's bad, and it's only going to get worse as more and more jobs are lost," he went on saying.

"There are no quick solutions to the serious problems we are facing," he said, "but it's also important to recognize that the world has changed, and if we're going to avoid these meltdowns in the future, we have to adapt. And not just the private sector, but government too."

That does not mean more regulation is needed, what's needed is smarter regulation, said the mayor. "In the United States, we have an antiquated patchwork of overlapping regulatory bodies -- there are five federal banking regulators, plus 50 state regulators," he explained.

He said that though the regulatory structure of Britain is more streamlined than that of the United States, both systems share an underlying weakness -- a lack of transparency.

"That is a big reason not only for the panics that our countries have experienced, but also for the freezing up of creditmarkets. We simply don't know the value of the assets that financial institutions are holding," he added.

Therefore, the Mayor pointed out, "greater transparency will help restore confidence and trust -- which is exactly what the market needs to break that cycle and prevent it from happening again."

Mayor of New York Michael Bloomberg delivers a lecture in London Monday, Oct. 6, 2008. During his visit the Mayor also participated in a City of London Economic Roundtable discussion.

He suggested that the United States and Britain undertake broader reforms that will promote stability, transparency and efficiency.

If New York and London are going to remain the world's leading financial centers, a "special relationship" between the two cities should be strengthened.

"There are plenty of emerging financial capitals that are gunning for us -- from Dubai to Shanghai, and from San Paulo to Singapore. The more we can work together, the more we can share ideas and strategies and promote more common regulatory standards, the more successful we will both be," he said.

"Capital now moves around the world at light speed, companies are more mobile than ever, countries are increasingly interdependent on each other for goods and services, and China, India, and other emerging economic powers have become, for the first time in history, major exporters of capital," Bloomberg said.

According to the Mayor, the United States and Britain have a lot to share with each other in efforts to boost public transparency and accountability, accessibility of government services, public safety and emergency management, and in areas like infrastructure and combat against climate change.